Community Vote On P3 Hospital

Jeff Green | Apr 04, 2013

A 270-bed hospital being built in Kingston by Providence Care to providerehabilitation, complex continuing care, specialized geriatrics, palliative care and mental health services to South Eastern Ontario residents, has been universally welcomed by health care workers, patients and community partners.

However, the construction project itself has been the subject of some controversy. The opposition has been led by the Kingston and Area Health Coalition (KAHC)

The huge (estimated cost $360 million) project on the shores of Lake Ontario is being contracted out on the basis of what is commonly called a Public-Private-Partnership (P3) basis. Three multi-national consortia are eligible to answer a Request for Proposal (RFP) that has been set out for the project.

This, according to Ross Sutherland, former NDP candidate in Frontenac County and currently the president of the KAHC, will inevitably lead to higher costs than a traditional public tendering process.

“The vague claim is that there will be savings of 10% - 25% in construction and long term maintenance costs, but at the same it has been acknowledged that the standard return in investment for the winning consortium will be 12%. On a project that could well reach $400 million, that’s a lot of profit,” said Sutherland.

Although Sutherland’s group has opposed the construction model from the start, the RFP process is now underway and the KAHC is now focussing their efforts on the maintenance aspects of the contract.

“We were very concerned that all of the soft services in the building, from supply of linens to cleaning to food service, were going to be included in the contract, but fortunately that is now off the table,” Sutherland said. “Still, as it stands the RFP includes maintenance for things like the roof, elevators, walls, etc. for 30 years. The public purse will be the source of private sector profit for a long, long, time if the maintenance provisions are not removed from the RFP, which is something that can be done at no cost.”

Providence Care has taken exception to the KAHC assertion that the new hospital was ever slated to be managed by the private sector.

"The private sector has always been engaged in infrastructure projects and will not own or run the hospital. They are being contracted to design, build, finance and maintain the hospital," said Glen Wood, chair of Providence Care’s Board of Directors, in a letter to Kingston City Council. Wood added that critics of the project have been “actively spreading misinformation” about the project.

For their part, the KAHC continues to maintain that the P3 will just add costs to the project.

“P3s have been well-studied and are found to be more expensive, less accountable and disruptive of hospital functioning. The new regional hospital will cost $100 million more than using public financing and non-profit maintenance and administration. All that extra money for profits has to come from somewhere. In our area it is coming from funding cuts to rural health care services,” Sutherland said.

“International researchers have coined this ‘the P3 effect’”, he said. “It’s like a black hole: the high costs of financing the P3 suck money out of the regional health system, resulting in continual erosions of services in the surrounding hospitals and community health care.”

To focus public attention on the issue, the Kingston Area Health Coalition is organizing a sort of citizens’ referendum to ask the public if they want a “public not for profit hospital or a for profit P3 hospital”.

Polling booths are being set up on Saturday, April 13 throughout the City of Kingston, at the Foodland store in Sydenham, and at the Oso Hall in Sharbot Lake, for a vote on whether the 30-year contracts should stay in the RFP for the project. Polls will be open from 9-5 and anyone seeking to set up another polling location can call 613-507-6673.

Another group who opposes the way the project is being structured is the Registered Nurses Association of Ontario, which has set up an online letter writing campaign at http://rnao.ca/policy/action-alerts/no-p3-minister.